Repeal of the ACA and tax cuts

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It seemed to be the only rationale

After weeks of withering criticism over their plan to take health insurance from 22 million to finance tax cuts for rich people, some Senate Republicans have been kicking around an idea: Maybe don't give tax cuts to rich people.

Sens. Susan Collins of Maine, Mike Rounds of South Dakota, and Bob Corker of Tennessee have proposed the idea of retaining at least the 3.8% surtax on high earners' investment income — though the same political and policy logic would seem to also apply to another Obamacare tax, the 0.9% surtax on high earners' labor income.

A lot of commentators, including me, have been saying for months that the main objective of the Republican health bill is to cut taxes on the rich. The whole reason Republican leaders decided healthcare had to go before tax reform was that they wanted to repeal high-income taxes imposed in Obamacare before setting a revenue baseline for tax reform.

They wanted to get this tax cut for the rich out of the way so they could have as much room as possible to cut taxes on the rich again in a few months.

Obviously, if they don't repeal the high-income taxes, they won't have done that. They could repeal the taxes later as part of tax reform, but then they'd have to find a way to pay for that (other than throwing people off Medicaid), or they'd have to grow the deficit, in which case the tax cuts couldn't be permanent.

That's why I expect this idea won't go anywhere. Republicans are very eager to repeal these taxes on rich people, and "these taxes were part of Obamacare and we are repealing Obamacare," while not much of an argument, is better than any argument they'll have later for repealing them on a standalone basis.

Obamacare repeal gives rich what they want, not so much everyone else - Business Insider

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Even some Republicans have to acknowledge reality:

There is now a faction of Republican senators that would like to save the Obamacare repeal push by doing exactly this. “We are going to figure out a way, I believe, before Friday comes to greatly enhance the ability of lower income citizens to buy insurance on the exchange and at the same time my sense is that the 3.8 percent [investment tax cut] is going to go away,” Tennessee Senator Bob Corker told reporters on Wednesday. “It’s not an acceptable proposition to have a bill that increases the burden on lower-income citizens and lessens the burden on wealthy citizens.”

It is helpful that Corker dispensed with his party’s Orwellian pretenses about moving the medical system toward “patient-centered care” or “rescuing” the public from Obamacare, and described Trumpcare for what it is: essentially a zero-sum transfer of resources from poor and working class people (in the form of health care subsidies) to the wealthy (in the form of tax cuts).

The Heartless Tradeoff at the Heart of Trumpcare | New Republic